Correlation Of Exchange Rate Changes On Wenzhou's Exports

July21,2005, China began to implement market supply and demand with reference to a basket of currencies, a managed floating exchange rate system; increased exchange rate uncertainty and complexity. Since then, China’s exchange rate fluctuation started showing in the gradual upward trend. In conventional economics, a country’s exchange rate will rise in the country’s export trade adversely affected, however, the actual situation of China’s foreign trade contrary to the theory, the situation of China’s foreign trade surplus in recent years, the gradual rise in the RMB exchange rate is not only the case has not been reduced, but increased year by year.In this paper, the evolution of the RMB exchange rate regime, analyzes China’s exchange system history since the founding of New China and the history of changes in the RMB exchange rate, combined with the development of Wenzhou’s foreign trade situation, both from a theoretical and empirical analysis of exchange rate changes to import and export trade effects.This paper adopts Wenzhou monthly data import and export trade of August2005April2013, combined with the RMB real effective exchange rate index, research and analysis of this topic. In the empirical study, using descriptive statistical tests, ADF test for each data sequence analysis of a smooth, EG-step cointegration test, Granger causality final validation using different variables.Analysis by examining, we got results as follows:the first one, the RMB real effective exchange rate impacts Wenzhou’s export trade postively but small. Second, the RMB real effective exchange rate changes do not affect Wenzhou’s import trade significantly, there is no causal relationship between the two.Finally, this paper puts forward proposals on how to deal with RMB’s exchange rate according to Wenzhou’s situation.